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Summary of the Supplementary Business Rates White Paper October 2007 October 19, 2007

Posted by liverpoolchamber in British Chambers of Commerce, Business, Chamber Services, Legislation, News, Services.


The government published ‘Business rate supplements: a White Paper’ on 9th October alongside the 2007 Pre-Budget Report and Comprehensive Spending Review.  This followed the Government’s commitment to report back on proposals for a Supplementary Business Rate (giving local councils a power to levy an additional payment on top of the national business rate) in the light of the recommendations of Sir Michael Lyons’ inquiry into the role and financing of local government.

The Government expects to legislate to enable Local Authorities to bring in the supplements by April 2010.  The document can be found in full on the HM Treasury website.

Key proposals
•    The Government plans to introduce a power for Local Authorities to raise and retain local supplements on the business rate.
•    Local Authorities’ will be required to undertake a statutory consultation with local business and other stakeholders on supplement proposals.  This will need to cover expenditure plans, timescales, funding sources, further exemptions or reliefs, how expenditure overruns will be dealt with, and an assessment of economic costs and benefits of the proposal.
•    While statutory consultation (rather than a business vote) will be mandatory for all proposals, the Government will require a ballot of businesses where the contribution supported by the supplement exceeds a third of the total cost of a project.  Such a vote would follow the Business Improvement Districts (BIDs) model of a double lock ballot of businesses affected.
•    Government will not specify what revenue from supplements can be spent on legitimately but will set out areas where it cannot be spent e.g. children’s services.
•    Government will consult on how to best ensure any supplement is genuinely additional spending.
•    Government does not intend to set a national maximum limit on the duration of supplements.
•    Government will place a national upper limit of 2p in the pound on the level of supplements that can be levied.
•    Small business hereditaments with a rateable value of £50,000 or less will be exempt from paying the supplement (with Local Authorities able to go further or taper payments above this limit).
•    The power to raise supplements will only be available to upper-tier authorities (in consultation with Districts in the Shire Counties) and in London with the Greater London Authority not the London Boroughs.
•    Local Authorities will be able to use the supplement as a means of raising borrowing funds in line with Prudential Borrowing rules.
•    Government will discuss the case for allowing Local Authorities to reduce rates with business, local government and other stakeholders.
•    The Secretary of State will retain a reserve power to intervene if the conditions of a supplement, such as the use to which the supplement is put, are breached.
•    Government will establish a national project panel to assist authorities in developing proposals.
•    Decisions about offsetting BIDs contributions against Business Rate Supplements will be made locally.

BCC position

•    The BCC is opposed to the principle of business rate supplements, which will be an extra burden on businesses that are competing in the face of enormous global competitive pressures.
•    We are very concerned that the white paper indicates Government wants to tax businesses further to bridge gaps in transport spending that have not been addressed in the Spending Review. It is unacceptable that businesses should be subjected to an SBR for this purpose.
•    With a particularly tight local government settlement, Local Authorities will be looking for any new ways of raising finance.  In this context, it is essential that businesses are given a vote on Business Rate Supplement proposals.
•    Supplements must also be for a major infrastructure project that business believes is necessary such as transport, have a clear project plan with ring-fenced funds tied to the scheme and be wholly additional money.

Contact: Kevin Hoctor – k.hoctor@britishchambers.org.uk  or tel: 020 7654 5809.



1. Managed Account - October 19, 2007

“Government will place a national upper limit of 2p in the pound on the level of supplements that can be levied.”

one p in the pound should be enough!

2. marketinghelper - October 24, 2007

I find this info useful, I agree however with the first comment

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